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European Investment Bank to lend to defence projects

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The EU’s lending arm, the European Investment Bank (EIB), announced on Wednesday (8 May) that it was changing its long-standing policy of not investing in military products by lifting restrictions on dual-use investments.

In a statement, the EIB’s board of directors said it had approved “the updated definition of dual-use goods and infrastructure eligible for financing by the EIB Group”, removing the minimum threshold of expected revenues from civilian applications or the share of civilian users in a defence-related investment.

Previously, the dual-use lending criteria limited the Bank’s investment in defence-related projects to civilian applications that denied their military use.

EU finance ministers, who act as the EIB’s directors, agreed to “facilitate financing” by paving the way for “private intermediary financing” for small and medium-sized enterprises (SMEs) active in security and defence.

They also added projects and infrastructure used by the military or police that also serve civilian needs to the bank’s list of “appropriate targeted investments”.

The move will expand the bank’s ability to invest in products and technologies used only by the armed forces, including cybersecurity, radar, satellite technology, infrastructure and equipment, as long as they “do not pose a lethal risk”.

“The changes are expected to accelerate investment and improve access to EIB Group financing for the European security and defence sector,” the EIB said in a statement.

The EIB had already committed EUR 6 billion under the Strategic European Security Initiative (SESI) and the European Investment Fund’s (EIF) Defence Capital Facility.

While the European defence industry and defence ministries have long been asking the EIB to increase its contribution to the EU’s growing defence effort, this request was only put on the table of finance ministers in February, and EIB President Nadia Calviño launched a two-month consultation process with the European Commission.

According to several sources with knowledge of the negotiations, one of the key conditions for the EIB to move beyond its traditional lending mandate is its ability to maintain its environmental, social and governance (ESG) ratings as well as its top credit rating.

In particular, the triple-A core credit rating allows the lender to obtain very favourable borrowing conditions on the market. As Euractiv has previously reported, this is a key priority for the bank’s shareholders (i.e. the bloc’s 27 member states), which neither the bank nor national governments want to jeopardise.

Last week, US credit rating giant Moody’s became the first rating agency to confirm that not only the EIB’s ESG score but also its overall credit rating would be put under review if significant changes were made to the dual-use policy.

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Netherlands to introduce border controls starting December 9

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The Dutch Ministry of Migration has announced that border controls will be introduced along land borders with other EU Schengen area countries and on certain flights within the Schengen zone starting December 9.

These six-month border controls are part of a broader immigration policy shift proposed by the right-wing coalition led by Geert Wilders’ Freedom Party (PVV), known for its anti-immigration stance.

Migration Minister Marjolein Faber introduced the policy through an official press release following its approval by the Council of Ministers. Faber, representing the PVV, stated, “It is time to take concrete action against irregular migration and people smuggling. That is why we will reintroduce border controls in the Netherlands starting in December.”

The border control measures will officially take effect on December 9. The Netherlands asserts that this decision complies with EU law, which requires member states to notify Brussels at least four weeks in advance when intending to restrict freedom of movement.

Earlier this year, Faber indicated to Brussels that the Netherlands also sought to opt-out of EU refugee obligations.

Geert Wilders, who led the PVV to victory in last year’s elections, celebrated this move on social media, emphasizing that the PVV has kept its promise. Wilders has long advocated for closing the Dutch borders to curb migration and strengthen national security.

Faber did not disclose specific details on how these border controls will be implemented. The plan does not allocate additional funding to the national police for these duties; instead, the six-month controls will rely on existing resources. Faber noted that the border checks should be conducted in a way that minimizes traffic disruption.

The Netherlands shares extensive land borders with Germany and Belgium, where police currently conduct spot checks. Last month, Germany implemented similar border checks with France, Belgium, Luxembourg, Denmark, and the Netherlands, citing concerns over extremist threats.

Both Germany and the Netherlands are part of the Schengen area, a border-free travel zone that includes most EU states along with Iceland, Liechtenstein, Norway, and Switzerland.

Under EU law, member states are permitted to temporarily reintroduce border controls in cases of serious security threats. However, the EU guidelines specify that such measures should be a last resort and strictly time-limited.

Following recent incidents involving Israeli football hooligans and Arab and Muslim communities in Amsterdam, the PVV and Wilders called for the deportation of migrants involved, asserting that irregular migration contributes to increased anti-Semitism.

‘Pogrom’ or ‘Zionist provocation’: What happened in Amsterdam?

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Agreement reached in Germany: Early elections scheduled for 23 February

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German Chancellor Olaf Scholz’s party, the Social Democratic Party (SPD), along with opposition Members of Parliament (MPs), have agreed to hold early federal elections on 23 February.

To initiate the election process, Chancellor Scholz must first call for a vote of no confidence in the lower house of parliament. This vote is expected to take place in early December. If the chancellor loses the vote, he can request that the German president dissolve parliament and schedule elections within 60 days.

Germany, Europe’s largest economy, was thrown into political uncertainty last week after Scholz dismissed Finance Minister Christian Lindner of the Free Democratic Party (FDP). This decision led to the collapse of the ruling coalition following a dispute over borrowing to bolster military support for Ukraine.

Initially, Scholz had proposed a no-confidence vote in January, with elections to follow “at the end of March.” However, representatives from the business community and members of the main opposition party, the Christian Democratic Union (CDU), pushed for an earlier date. They argued that elections in March would prolong the nation’s uncertainty and that a February vote would help restore political stability.

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Scholz negotiates early elections

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German Chancellor Olaf Scholz has indicated his willingness to negotiate an earlier election date in exchange for opposition support on key legislation that could enable elections sooner than anticipated.

This represents a notable departure from Scholz’s previous statement on Wednesday, 6 November, when he announced plans to call a no-confidence vote on 15 January to ensure elections “by the end of March” after the coalition government dissolved.

On Friday, 8 November, Scholz emphasized that the democratic parties in the Bundestag should collaborate to determine which laws could be enacted by the end of the year.

“In light of a potential early election date, this agreement could clarify when it would be appropriate to initiate a vote of no confidence in the Bundestag,” Scholz stated at an informal EU summit in Budapest.

The Chancellor also stressed the need for a measured, calm approach to setting an election date. However, CDU leader Friedrich Merz reported that Scholz had resisted calls for an immediate vote of confidence during their Thursday meeting.

While constitutional law does not compel Scholz to call a vote of no confidence before the scheduled election date of 28 September 2025, the minority government’s ability to pass critical legislation is contingent on opposition votes.

Scholz declined to specify whether there are particular legislative priorities that would prompt him to advocate for early elections.

Following Scholz’s statement, Germany’s Federal Electoral Office issued a caution against early elections. Its head, Ruth Brand, warned that setting “dates and deadlines” around Christmas or New Year’s Eve would make essential election preparations “nearly impossible.”

By law, any snap election must occur within 60 days of the dissolution of parliament or 21 days after a vote of no confidence.

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